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You Buy a Call Option on Merritt Corp

question 66

Multiple Choice

You buy a call option on Merritt Corp.with an exercise price of $50 and an expiration date in July and write a call option on Merritt Corp.with an exercise price of $55 with an expiration date in July.This is called a ________.


Definitions:

Levied

The act of imposing or collecting a charge, tax, or fee by authority or law.

Highest Price

the maximum price at which a good or service is sold in the market or the highest price a buyer is willing to pay.

Unconsummated Transaction

A transaction that is proposed but not finalized or completed.

Tax Rate

The percentage at which an individual or corporation is taxed on earned income, investments, or properties.

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